Insider Business Finance Minister unveils new package to support economy

Finance Minister unveils new package to support economy

Finance Minister Constantinos Petrides unveiled on Thursday a new package to support the economy amid Covid-19, by directly supporting very small businesses and the self-employed, providing targeted government guarantees worth €1.5 billion and giving tax incentives to landlords in order to reduce rents.

The package is subject to the approval of the European Commission and the House of Representatives. Petrides said that draft bills need to be handled as an item since “one cannot replace the other” as businesses remain closed and the risk of not reopening grows bigger.

“Moving on to the second stage of the handling of the pandemic and the gradual lifting of restrictions, the Cabinet approved a new, more focused support package for the economy with three new plans” the Minister stated.

The draft bill to support businesses, on the basis of the European Commission’s provisional framework for state aid during the COVID-19 outbreak, provides subsidies to very small businesses and the self-employed employing up to 10 people, as follows:

Businesses who fully suspended activity until May 3 receive €2,625
Businesses who fully suspended activity after May 4 receive €3,500
Businesses who partially suspended activity until May 3 get €1,875
Businesses who partially suspended activity after May 5 get €2,500
Self-employed who fully suspended activity until May 3 get €1,125
Self-employed who fully or partially suspended activity until May 4 get €1,500

The Minister said that up to 40,000 businesses may benefit from the plan, that provides substantial aid to small businesses, in order to cover various expenditures during the crisis.

Petrides said moreover that the law also provides for liquidity to businesses through guaranteed loans worth €1.5 b. Out of the total amount, €300 m will be committed to very small businesses employing less than 10 people, €1 b to small and medium businesses and €200 m to large businesses.

The state will guarantee 85% of the loans to very small businesses and the self-employed and banks will guarantee the remaining 15%. The state will cover 70% of loans to large businesses and banks the remaining 30%.

Loans will be given for a period of 3 months up to 6 years with favorable terms and interest rates, the Minister went on, estimating that liquidity to the market will amount to €6 b in total.

The Minister of Finance also announced that two more bills approved by the Cabinet provide tax incentives to landlords reduce rents for a period of three months, to assist tenants affected by the COVID-19 crisis.

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